24 Hour Home Care President Ryan Iwamoto and CEO David Allerby say business is stabilizing.
At first glance, the home health care industry would appear to be one of the winners during the Covid-19 pandemic.
After all, with the disease wreaking havoc inside nursing care facilities, caring for patients in their homes seems much more preferable.
But the reality on the ground for the hundreds of home health agencies serving the Los Angeles area is neither so simple nor so rosy.
The main reason is that much of the patient stream — and revenue — has traditionally come from patients discharged from hospitals following surgeries. When hospitals stopped almost all surgeries in March, that patient stream slowed to a trickle.
Even after California Gov. Gavin Newsom lifted a ban on nonurgent surgeries on April 22, the number of procedures at most hospitals has not returned to anything close to pre-Covid levels.
So while most home health care companies saw their businesses dip as the Covid-19 pandemic took hold, agencies that rely more on post-surgical care were hit especially hard. They are having a more difficult time recovering their financial footing.
Agencies that generate most of their work from home health aides providing daily care to patients who are chronically ill or with limited mobility in six-hour or eight-hour shifts have fared somewhat better.
“If you’re a home health agency where a lot of the work is based on episodical, post-surgical care, then right now, you’re caught up in this bottleneck of halted hospital surgeries,” said Roger Strode, partner in the Chicago office of Milwaukee-based law firm Foley & Lardner.
“This bottleneck will loosen up over the next several months, but like so much else with today’s economy, it’s a matter of having the wherewithal to get from here to there, especially for smaller, less capitalized agencies,” he added.
One local home health agency facing just such a predicament is Intra Care Home Health Providers Inc., which is headquartered in Hancock Park.
Intra Care provides home visits from skilled medical professionals, with a focus on transitioning patients from hospital care to independent living at home and avoiding return hospital trips. The company, which was founded in 2000, has a full-time staff of 25 and more than 150 medical professionals who work as independent contractors.
“We’ve spent the last several weeks getting fully prepared to care for patients at home during this Covid-19 pandemic, but where are the patients?” wondered Dion Ugbebor, Intra Care’s chief executive. “They have stopped going to urgent care clinics and emergency rooms and doctors’ offices, so that means they have stopped coming to us.”
Ugbebor said her company’s revenues went down more than 30% in March and April and have only slowly started to climb back this month as some surgeries have resumed at hospitals.
She said the timing of the pandemic was particularly bad, coming just two months after the Centers for Medicare & Medicaid Services lowered reimbursement rates for many home health care providers.
Ugbebor said she hopes business will pick up as postponed surgeries resume. But she said that could come at a health cost for patients.
“Because patients have put off surgeries that are necessary, we could see more complicated surgeries and more complicated recoveries,” Ugbebor said. “That may give us more business, but that’s not the way we like to see this unfold.”
Likewise, business plunged at Western States Home Health Care Agency Inc. as the Covid-19 pandemic hit. Western States, which is headquartered in Westchester, serves most of Los Angeles County, excluding the San Fernando Valley. The agency provides home health visits as follow-up to hospital procedures. These visits include physical therapy and changing surgical wound dressings.
“We went from serving more than 400 patients to serving less than 275 patients in just five weeks,” said Patricia Farley, clinical director-designate for Western States. “We’ve gotten 10 new patients so far this month, but we’re still a long way from levels that we were seeing three months ago.”
The brighter side
For home health companies that provide nonmedical aides for in-home shift care, the hit from Covid-19 has been less severe.
At El Segundo-based 24 Hour Home Care, the total hours its 3,000 employees spent serving patients in California, Arizona and Texas went down about 20% in March and early April but then stabilized and has rebounded sharply in May, according to co-founder and President Ryan Iwamoto.
The initial drop came as families of patients and patients themselves grew scared of letting anybody into their homes as the Covid-19 pandemic spread rapidly, Iwamoto said.
Also, the small proportion of 24 Hour Home Care’s referrals that came from hospitals stopped with the elective surgery ban in mid-March.
But, he said, things began to turn in early April as the initial fear subsided and as family members began to pull relatives out of nursing homes and place them in home settings. Inquires rose sharply as April progressed, followed quickly by patient hours.
Also, Iwamoto said hospitals resuming elective surgeries have started transitioning more patients directly to home health care, sidestepping skilled nursing facilities.
“We’ve not yet made back all of the decline in March and April, but given this increase in inquiries, we expect to get all the way back by the end of this month,” he said.
The same trends are also occurring at Dallas-based AccentCare Inc., a large national home health care chain that serves most of California. AccentCare’s 4,000 clinical caregivers and 19,000 nonclinical health aides provide the full range of home health services, both scheduled visits for post-surgical patients and round-the-clock shift care for patients with chronic conditions.
Sara Castillo, AccentCare’s chief nursing officer, said its normally expanding business went down slightly in the Los Angeles area in March and early April as fear of Covid-19 kept potential patients away. But, she said, business has since rebounded and, as of mid-May, was nearly 10% higher than the pre-Covid level.
“We are seeing that families are not comfortable with putting loved ones in skilled nursing facilities with Covid-19 out there,” Castillo said. “And with so many SNF’s on lockdown and halting admissions, many people are turning to home health.”
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